InContact - 11 May 2017

Included in this issue: Bank of England's plans for renewed RTGS service; Barclays campaigns to take on fraudsters; Delivery plan agreed for consolidation of UK payment schemes and more...

UK

Bank of England's plans for renewed RTGS service

The Bank of England (BoE) has published a report setting out its blueprint for a renewed real-time gross settlement (RTGS) service. RTGS is where banks hold their sterling bank accounts. They can store balances on these accounts or use them to make payments. On an average day, RTGS settles around £500 billion between banks. Given its central role, the BoE recognises that it has to anticipate the demands that could be placed on the RTGS service in the medium term, safeguarding stability while also enabling innovation within a rapidly changing payment ecosystem. The key design features of the renewed RTGS service include:

Higher resilience.

Broader access.

Wider interoperability.

Improved user functionality.

Strengthened end-to-end risk management.

The BoE's plan is for the majority of the enhanced functionality in RTGS to be live by the end of 2020. Commenting on the blueprint in a related press release, Andrew Hauser, BoE Executive Director for Banking, Payments and Financial Resilience, said that it sets out a vision of a renewed RTGS service that will safeguard financial stability while at the same time enabling innovation. He considers that the reforms will keep the UK at the leading edge globally by increasing resilience, broadening access and expanding functionality.

Digital Economy Act 2017: financial services aspects

The Digital Economy Bill has received Royal Assent and the text of the Digital Economy Act 2017 has been published. The Act contains the following provisions that may be of particular interest to financial services practitioners and which appear exactly as drafted in the Bill:

Section 112 of the Act (clause 85 of the Bill) amends the Financial Services and Markets Act 2000 (FSMA) to give HM Treasury the power to apply the settlement finality regime to payment institutions as participants in payment or securities settlement systems.

Section 113 of the Act (clause 86 of the Bill) amends Part 5 of the Banking Act 2009, which relates to the Bank of England's (BoE's) oversight of inter-bank payment systems, to extend its oversight beyond inter-bank payment systems to include other types of payment systems.

FinTech group appoints ex-Financial Ombudsman CEO as non-exec chair

Innovate Finance, the membership association for the UK’s global FinTech sector, has appointed Natalie Ceeney CBE to the board of the company as non-executive chair, taking over from Alastair Lukies CBE. Innovate Finance said Ms Ceeney has a track record of leading technology-driven change, improving the reach and delivery of products and services to customers.

Barclays campaigns to take on fraudsters

The UK's Barclays Bank is rolling out a service to enable customers to switch off debit cards directly from their mobile app as part of a £10m nationwide drive to increase the public’s awareness of financial fraud risks. The initiative comes as latest crime figures from the Office of National Statistics and Action Fraud show 5.6m fraud and cyber offences in the UK making up half of all recorded crime, costing the economy £11bn. Barclays believes the numbers could be even higher, releasing research which reveals a quarter of people in the UK have experienced a cyber-fraud or scam in the past three years, 18% of them more than once, suggesting that many crimes go unreported.

Delivery plan agreed for consolidation of UK payment schemes

The UK's Payment Systems Regulator and the Bank of England have agreed a framework for the consolidation of Bacs, the Cheque and Credit Clearing Company and the Faster Payments Scheme. The delivery plan, put forward by the independent Payment System Operator Delivery Group, aims to reduce the complexity and costs of having three separate retail payment system operators (PSOs). The unified entity would also become responsible for the next stage of the development of the New Payments Architecture (NPA), an industry-led initiative that aims to increase competition and resilience as well as enhance innovation across the payments and banking industry.

Worldwide

EBA final draft RTS and ITS on standardised terminology and disclosure documents under Payment Accounts Directive

The EBA has published a report containing the final draft version of regulatory technical standards (RTS) and implementing technical standards (ITS) setting out standardised terminology for services linked to a payment account, standardised formats and common symbol of the fee information document (FID) and the statement of fees (SoF), under Articles 3(4), 4(6) and 5(4) of the Payment Accounts Directive. The annexes to the report contain the:

The EBA is currently translating the standardised terminology into all EU official languages and will make it available by the end of May 2017. The next step is for the RTS and ITS to be submitted to and adopted by the European Commission. Following that, member states will have to integrate the standardised terms into their provisional lists of the most representative services and publish their final national lists.